Be aware to always trade according to the right signals, this is just an opinion 🙂
US:
For some time now, the market recovered and sticked to its usual behavioral pattern in
the time from March to May. Despite the reopening coming along, companies are extremely
overvalued, especially given the fundamental data. GDP for the second quarter is supposed
to be horrible, therefore I only expect a sideways and slight downwards movement for June.
Since we have a lot of bad news potential, I stick with an ongoing crash potential and a
retest of the last market lows. All it needs is a catalyst for it and there are plenty from the
newly risen tensions between the US and China, to horrific market data, historical high
unemployment and bankruptcy of big named companies.
EU:
I expect EU markets to behave similar to the US for the very same reasons, however with
more self-made issues and upcoming problems as the EU funding for the next few years,
Brexit negotiations and of course the potential debt crisis of several countries (especially
Italy) as I explained in more detail in my last Webinar.
UK:
Since the UK turned 180 degrees from a quite relaxed approach in the Covid Crisis to
hysteria and locking down most of the country and having no real plan on how to revive the
economy my outlook changed already 2 months ago from being highly optimistic to very
pessimistic. Especially the idea to raise taxes to pay for the lockdown cost will hurt the
economy further so the UK is most likely the lagging country in the world in terms of
economic recovery which will affect the GDP and the FTSE. It’s already thought of the
biggest drop in GDP since 1706 (!).
Currencies
USD:
The long term rise of the US Dollar comes to an end temporarily. Despite that I expect
that the USD will be stronger than the EUR and will continue to gain value against the Euro.
In another Corona Crash the US Dollar is likely to lose against the JPY as well as "save haven"
currencies like SEK, CHF, SGD and GBP. On the 09 th -10 th of June we will hear whether the FED
comes up with further ideas and actions regarding the monetary policy.
EUR:
After moving done as predicted, there was a breakout at the end of the month which
now seems to come to a halt. I expect a reversal at the beginning of June followed by some
recovery and an overall flat month. However, due to a potential European debt crisis, there
is an increased downwards risk over the next 6 months at least. Watch out for Italian bond
prices, credit default swap rates and rating on government debt of the big rating companies.
GBP:
After the latest drop against the Euro I expect a slight recovery at the beginning of
June. Due to the Corona politics, the UK economy is suffering badly which will also affect the
GBP negatively. Overall, I expect further losses for the GBP in June.
Commodities
Oil:
With more and more corona lockdowns being taken back, Oil is likely to continue a
smooth rise. It is also backed by several seasonal factors although demand will stay overall
lower especially since a lot of summer flights will be cancelled and/or have way less
passengers.
Gold:
A potential breakout at the beginning of June followed by a reversal and a
continuation of the sideways movement we have seen recently.
Silver:
After a breakout from the middle of the month I soon expect a slight correction.
Overall, I see the month sideways and slightly down.
Coffee:
The rise and fall in May happened exactly as predicted. I expect the current drop to
continue at the beginning of June with a recovery in prices in the middle of the month and a
further drop at the end of June.
Soy beans:
After being mainly flat over the last month, I expect a breakout and higher prices
after the current small correction. This should continue until the end of the month so we will
be seasonally up.
Corn:
At the beginning of June I see still a potential for higher prices and a breakout in corn
prices. Latest from the mid of June I’ll prepare for a longer-term drop-in prices from the last
high levels.
Zinc/Nickel:
We saw quite some choppy trading lately mainly going sideways. I expect a
potential breakout at the beginning of the month with a following retracement and higher
prices at the end.
XLP/XLU:
Since most stocks might face a sharp decline over the next weeks and the situation
on the vaccine front is quite nebulous in terms of who will be the pharmaceutical winner, I
will have a close look at consumer staples and utilities in the coming weeks and months.
Currently they both look like they will go down for the next time, however I think of turning
points to be a good entry point. For those that don't want to screen the whole sectors for
the best companies you can use the Sector ETFs in the S&P500 for these companies. This is a
trade that goes throughout the month and might last for the whole summertime.
USD/CHF:
I expect a further drop of the USD against the CHF at the beginning of the month
and then further lower prices until the end of the month.
Rough Rice:
Potential breakout and new higher prices at the beginning of the month,
followed by some choppy price action to the bottom ending lower at the end of June.
As always, make sure you do your own analysis. Happy and successful trading ☺
